ftnteXure - 1
sTOCK AUDIT REPORT DATE OF VISIT AT BMNCH AT UNIT DATE OF SUBMISSION OF REPORT Name of CA
Name of the Account
Constitution
firm i
Name of the person
who inspected the account Name of the Person from the branch who
Name of the branch
accompanied CA Name of the Person/s
RO/FGMO/ZO
contacted at borrowers site: Duration of audit
Category of branch
ADDRESS :
Office
Factory
fuset Ctassification
Category of borrower Nature of activitY
Regular/short lf short review, give vatidity period of timit Name of tead bank
Date of tast renewal
Banking arrangement
Our Bank's share
Sote/Muttipte/consor tium
Date of last consortium meeting hetd
t
POSITION OF ACCOUNT AS ON THE DATE OF VISIT :
Nature of facitity
Limit sanction ed
Draw ing
O/s
as
on
Vatue of Margin security
lnteres
Pow
t
er
A.FUND BASED
i)
Working
CapitaI
ii) Term Loan
B. NON FUND BASED
INSPECTION OF ACCOUNT AT BMNCH TERMS AND CONDITIONS
fucertain whether at[ terms and : Yes conditions of sanction are comptied with
lf no, the terms.and conditions : which are yet to be comptied with
/
No
a) b)
c) d)
2. DOCUMENTATION i) Whether proper documents
:
obtained. lf not, give detaits Date of
Documents
Rate
of
:
Yes
/
No
Date of (ast Debit Bata;'ice Confirmation (DBC)
ii)
:
Whether the documents have been vetted by advocate/Legat Dept. as per the norms of the bank
Yes
:
Whetherequitabte/Simpte : mortgage of property created, if not, nature of deficiency
Yes
/
No
v) Whether stamps of adequate: vatue affixed on documents and also for creating equitabte mortgage of property. lf not, give details
Yes
/
No
Yes
/
No
/
No
vi) Date of vetting/verification of documents
vii) Whether charge on assets
:
property created (inctuding fi rst charge/second charge/ pari passu charge) lf not, reasons for non-creation of charge
viii) Detaits of the registration of charge inctuding modification / enhancements: Wherever required, whether charge registered with ROC within prescribed time (Form 8 & 13 fited or not)
Date of registration
of charges
lf charge is not yet registered, the reasons therefore:
- 7-
Date of certificate
Value of charge
x)
Any other irregularity observed in respect of documentation
for
l) ii) ii-a)
FY
from
to
_)
Whether the account is being Regularty/ activety operated Whether sates are being routed Through the account
Whether cash withdrawats are regutarty allowed, the reasons of attowing cash
withdrawat. Whether in your opinion such cash withdrawats are warranted or not.
ii-b)
Any transaction indicating diversion
of
funds noticed Random check of 5% to 10% of the totat
debits (subject to minimum 20 transactions)
ii-c) iii)
Loans & Advances to sister/associate concem
No. of cheques returned for financiat reasons
iv) v)
vi)
vii)
Detailed observations as regards any large transaction of Rs.5.00 lacs and above be commented upon Average daity ba[ance (debit as well as credit) Whether the utitization of the timit is more than 90% or not? Credit/Debit summations in relation to utilization of the timit and the sates projection? Whether the interest has been seMced
within 10 days? Number of times the account remained overdrawn Whether the excesses have atlowed Continulousty or occasionalty or rarely
been
*l-t-
yes/No
Average tirire takelr for adjusLrnent oi Excess:
iv) v)
Ascertain reasons for such overdrawats Whether excesses aLtowed have been reported regutarly to higher authority: Whether excesses have been confirmed or not? lf not confirmed action taken for adjustment of excess Whether PC is adjusted timety? lf not give the fottowing detaits S no Amount Last date of Shipment Since when overdue
Yes/No Yes/No
Yes/No
Whether extension of time has been taken/apptied for to ECGC and upto which date it is vatid (in case of
v) vi) vii) viii) ix)
overdue PC) Whether PC is adjusted by apptication
I?:"r:1ll yes/No
x) . xi)
Details of overdue bilts, both intand/foreign Detaits of bitl.s retumed unpaid Buyer wise ECGC coverage obtained as per terms of sanction or not ls there any devolvement of LlC, if yes, number of L/Cs devotved, amount and the date of devolvement Reasons of devotvement of L/C be given in brief Whether any guarantee invoked? lf yes, number, date and amount. Reasons of invocation of L/G be given in brief No. of guarantees expired but stitt
xii)
outstanding. Whether interest is being seMced
xiii)
3a 4
i)
regularty or not. lf not detaits upto which the interest has been repaid and the amount of overdue interest. ln case of term [oan, whether: repayment of instatlment is regular, if not details upto which the instaltments have been repaid and the amount of overdue instat[ments Profitabitityforretationship(Totat earning of the bank with the retationship be mentioned) Submission of statements Whether stock statements are being
Yes/No
' i-a) ii) iii)a)
b) c) d) iv) a) b) c) d) B. 1
a
submitted regutarty Whether book debts statements Yes/No being submitted regularty Date of last stock statement Whether DP is being catcutated: Check Yes/ No DP register. lf not Maintained, give remarls Whether QPR statements submitted per terms of sanction. (Details to be
are
as QPR-I
given) Whether operating timits are fixed as per QPR? Whether the information submitted in qPR statement. ls as per the book of aicount of the party? (anatyticat view) Whether monitoring reports is submitted regular[y? lf not submitted give details when it was last submitted. Detaits of insurance policy Name of insurance
being
Vatidity:
from
QPR-ll
QPR-lll
Yes/No
company
Amount of the policy
to
lnsurance coverage Comments on any discrepancy in the poticy tike the address of the
godown/shop/unit, type of goods insured and inadequacy etc.
Unit/Visit Name of the person contacted at
unit
Amount of the policy
Whether party's name board has been Yes/No prominentty disptayed? Whether notice of hypothecation Yes/ No bank/s has been prominently disptayed Last Production capacity of the Licensed capacity lnstalted capacity Actuat capacity Method of vatuation of stock Raw material
of
2 i) ii) iii) 3a i) ii) iii) 3b 4
year
unit
This year
Stock in process Finished goods
lf not in order
give details
Comments on the discrePancies observed in 3 above particutarty the effect of change in the method of vatuation of stock on vatue of stock Stock Position of hypothecated stock as receivables and sundry creditors of same date.
on
and postion
of
A. PHYSICAL INVENTORY: (Stocks)
Particurars
Vatue of stocks as shown in stocks statement as
of
SillJ:ffl
i) Raw Materia[ ii)Stock in process iii)Stores dnd spares iv)Finished stock Totat Add purchases (from the date of stock statement titt the date of inspection) Less Material consumed/ reduction on account of sates (from the date of stock titt the date of inspection) Add stocks given on job work Total Less stocks reqeived on job work Less stock betonging to sister concerns for which no payment has been made. Total Value of Stocks Gross sates minus gross
profit returns shoutd represent net sates during the period
Total value of stocks must tatty with the book of accounts maintained by the party ln case of excisabte items, the excise register shoutd be checked to find out stock position. Othe-rwise stock
regist
checked to record the stock position. Stock
received under LlC or not retired the bitts sh
bitls, in respect of which the'company has te calcutating the drawing power.
rcated value-wise into three categories A,B and c depending cost items. while high cost items to be verified at teist g0%, may be verified.at random covering about 40% and ioz or thu total value of stocks dectared B. Diawing Power
aI@
i)Vatue of the stock as arrived ii)Less unpaid stocks including the stock received under DALiCLG or under bitls iii)Less value of stocks non saleable/obsotetG oivatue of stocks left over. iv) Less value of stocks normatty 3/6 months otd. lt shoutd be taken as per sanction
whichffi
terms) Less Margin Drawing Power
-T
C. Book Debts
the Dartv's auditor not pertaining to the business / balances of sister concern
D. Drawing Power (Book Debts)
5r. No 1. 2. ?
Particulars Book debts availabte for drawing power as per ctause 4-C above /vlargin on book debts Drawing Power
Amount
Verification of Book Debts Cotlect age wise and party wise break up of book debts and party wise re b- Whether receivabtes are routed through the E. a-
c-
d"
account? Average time taken for realization of book debts to be compared with the past trend / lndustry trend/trade trend. Reasons for any deviation to be anatysed and commented upon. Overa(l observations as to quatity of book debts?
e-
Verify excise records/sates tax returns/assessrnent orders of sates tax
stock and book debts as on the Balance Sheet date shoutd be compared with value of stocks as on the date of inspection G. Composition of vatue of
5. Stocls sent for job work to other processors: a) Whether
letter of lien and letter of free access is obtained?
b) Detaits of the stocks sent on job work: Nature stocks
of
of
Vatue of
To whom
Date
Stock.s
sent
dispatch
Proof of dispatch
Remarks
c) White chechng the movement of stock, a counter check coutd be made of records pertaining to excise duties and Sates tax wherever appticabte, in the form of chattans and registers.
-8-
6) Stock received for job work or stocks belonging to sister concern/auied concerns: Nature of stocks
From whom received
Date of
receipt
Value of stocks
Proof of
Whether such
receipt
stocks are segregated & kept
apart from the stock Hyp to the bank 7, Whether the value of the stock as reveated from the book of the party and actuatly tying at the site of the party as arrived at above talties with each other? lf not the variation if any to be anatysed and reported.
8. Whether inventory [evels accepted have been fottowed by the company? lf not the reasons to be anatysed and reported here.
9. Reasons of any sudden increase in the raw material/stores and spares, if any: l0.Reasons of any abnormal increase in the finished goods, if any: Whether the finished goods include the fotlowing:i) Goods returned by the buyers. ii) Left over or otd batches. iii) Non sateabte items being sub standard or obsotete items of stocks iv) With regard to finished gmds which have a shelf [ife, the auditors to verify how many reached within six months of the expiry date and such goods shoutd not rank for
drawing power. 1
'1.
Whether in your opinion the company is fottowing the correct stocking pattern?
Give comments.
a. Whether proper interna[ control of verification of the stock exists? 12.b. Whether proper books of accounts have been maintained by the party? (Stock Register/excise register/ sales tax records/ purchase register/ production register/sates register/work in process/ register for consumabtes & spares etc.) 12.
13. Details of obsotete stocks: a) Obsotete stock b) Stock as stipulated in the sanction advice shoutd not rank drawing power. 14. Whether the factory has been ctosed due to tock out/strike or the production has suffered due to [abour unrest during the year? Give details atong with the observation.
lS.Whether branch officiats have conducted the inspection of the stock/unit regularty, if yes dates of visits and the major irregutarities observed. Any materiat deviations/variances to be commented upon. 16. Verification of the ptant and machinery in case of term loan. a. Vbrify invoices/ bitls
b. Whether the end use of the bank finance is proper? c. Whether the ptant is in'worhng condition? d. ln case of project finance of the projects having long gestation period Cost overrun if any, the reasons be ascertained and the means of financing. 17. lrregutarities pointed out in last RBI inspections/Statutory lnspection/lnternal Audit Concurrent Audit regarding the verification of the stock/book debts and the steps taken by the branch for its verification lrregutarities
Steps taken
for rectification
a.
b. c. d. e. 18. Check whether the book of accounts are property maintained and ascertain the vatued of sundry creditors for goods and services used for production on the date of tast stock statement submitted to the branch and report differences, if any. To also comment whether they are banking with any other
bank.
'
19. Whether goods purchased under Usance Letter of Credit prior to the date of last stock statement are incLuded in the stock statement? lf so to deduct the amount for the purpose of catcutating drawing power.
20. Reasons, if any, existing or forseen, which indicates that the continuation of the retationship with the party witt not be beneficial for bank, be commented upon so as to plan for timety eiit from the a/c. 21. Detaited comments about your overatl observation in the account.
ENCLOSUREs
Signature of the Chartered
Accountant 1.
2.
Name:
Designation: Address:
?1
